Defend Against Losses with Nationwide’s Defender Annuity

Nationwide has launched a new RILA contract called the “Nationwide Defender Annuity” that will play on the other side of the fence in the RILA market as their “Nationwide Defined Protection Annuity”.  If you are familiar with the Defined Protection Annuity then you know that it operates in the “Floor/Stop Loss” world where you can choose from 100%, 95%, or 90% protection.  The Nationwide Defender Annuity only operates in the “Buffer” world where you can choose a 10% or 20% buffer.  It also has a cost of 1.1% and up to 135% participation with no cap depending on what investment option/s you choose.  Let’s take a closer look at this new contract.

The Nationwide Defender annuity is a very simple, easy to understand build.  It is a 6-year contract, you have 2 buffer options to choose from, 3 investment terms to choose from, and 5 indexes to choose from.

  • Buffer options: 10% or 20%
  • Investment Terms: 1-year, 3-year, 6-year
  • Investment Index’s: S&P 500, MSCI EAFE, S&P MidCap 400, Russell 2000, Nasdaq-100

Another neat feature that the Nationwide Defender Annuity has is a performance lock feature.  This feature can be used 1 time per investment segment period.  For example, if you were using the 1-year terms you would be able to lock in performance 6 times throughout the contract term, 1 time each year.  If you were in the 6-year investment segment term, you could only lock in 1 time throughout the contract term.  With that said there are 2 things to be aware of.  First, when you choose to lock in the performance of the contract, you lock it in, and the funds go to a fixed account where they continue to earn interest.  Once the investment term is over, you have the option to stay in the fixed account or go back into an index investment option/s for the next investment term.  The second thing to be aware of is that there is a cost to lock in performance.  The cost to lock in performance is .1% (of the account value) times how many years are left in the contract at the time you are locking in the performance.  For example, if you decide to lock in performance in year 3 then you would have a cost of .1 (of contract value) x 3 since there would be 3 years left in the contract at that point.

For more information on the Nationwide Defender Annuity please click on the link below or call their sales desk at (800) 321-6064.

Nationwide Defender Annuity

Micah Hesting

Business Development and Service Support Team Manager